Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of December 23 – 27, 2019.
December 20, 2019: The Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a notice further extending the time for certain FBAR filings, citing the 2016 notice of proposed rulemaking that has not yet been finalized. Taxpayers whose filing due dates were previously extended by Notice 2018-1 will now have until April 15, 2021, to file. For all other taxpayers with an FBAR filing obligation, the filing due date remains April 15, 2020.
December 23, 2019: The IRS released proposed regulations that modify how to determine the source of income from sales of inventory produced within the United States and sold without the United States, or vice versa. The regulations also propose new rules regarding how to determine the source of income from sales of personal property (including inventory) by nonresidents, where the sales are attributable to an office or other fixed place of business that the nonresident maintains in the United States. The regulations also modify the rules that determine whether foreign source income is effectively connected with the conduct of a trade or business within the United States. The IRS has requested that written or electronic comments, as well as requests for a public hearing, be received by February 28, 2020.
December 27, 2019: The IRS released final regulations relating to withholding and reporting tax on certain US source income paid to foreign persons. The final regulations provide guidance on the due diligence and reporting rules applicable to persons making certain US source payments to foreign persons, as well as guidance on certain aspects of reporting by foreign financial institutions on US accounts. The final regulations are scheduled to be published in the Federal Register on January 2, 2020.
December 27, 2019: The IRS published an issue snapshot regarding the impact of the Tribal Social Security Fairness Act on tribal council members’ worker status. The issue snapshot addresses whether an Indian tribe’s decision—or lack thereof—to enter into a section 218A agreement and to elect social security coverage for its tribal council members will affect those workers’ classification for other purposes of the IRC, such as income tax and retirement plan participation.
December 27, 2019: The IRS published an issue snapshot explaining that under the TCJA, a corporation with a fiscal year that includes January 1, 2018, will pay federal income taxes using a blended tax rate, as opposed to a flat 21% tax rate. The IRS stated that fiscal year corporations may want to consider filing an amended return if they previously filed an income tax return that did not reflect the blended rate.
December 27, 2019: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).
Special thanks to Jenni Saperstein in our Chicago office for this week’s roundup.